Louis Camiscioni, a water and sewer inspector, discusses the Flowery Branch water treatment plant on Friday.

Flowery Branch City Council has approved a nearly $3,000 study to determine when and by how much city sewer and water rates should be raised to meet the costs of the city’s sewer and water treatment plant, which loses money.

The council approved the study last Wednesday after auditor Dan Walker briefed the City Council and staff on the past fiscal year’s budget.

According to Flowery Branch City Manager Bill Andrew, total operating revenue last year for the city’s sewer and water treatment plant was $1,326,943, and the plant generated a profit of $62,072. But after the city paid off its annual bond with Bank of America, Andrew said the city’s sewer and water plant is "completely in the hole $33,374."

Flowery Branch Mayor Diane Hirling said the city signed a bond agreement with Bank of America in 2004 that requires the city to raise its water and sewer rates by 20 percent each year for five years. Hirling said the city reserves about $30,000 each month to pay off the bond and pays the bank $180,000 twice each year. Rates are usually raised in October or November, she added.

"The city’s general fund is OK; it’s for the enterprise fund that we need to increase water and sewer rates," Hirling said.

Andrew said the city’s sewer and water treatment plant has been operating at a minimal loss for several years, and the plant needs to generate more profit than $62,000 a year to be an asset to the city.

He said the city hired the Southeast Rural Community Assistance Project to conduct a survey to explore how the city’s sewer and water rates should be slowly increased.

"We’re looking at what’s called a differential rate that would take into account the extra cost of providing to customers farther away from the plant," Andrew said. He added the new rate structure could be in place by July 1.

The Flowery Branch sewer and water treatment plant currently serves 1,200 sewer customers and 950 water customers in Flowery Branch, according to Andrew. Hirling said 400,000 gallons of the city’s plant, which has a capacity of nearly one million gallons, serves Hall County, and another portion serves the City of Oakwood.

Andrew said he anticipates that the city’s plant will serve the expected development in the corridor between Phil Niekro Boulevard and Interstate 985 in Flowery Branch, as well as development on the future site of Exit 14 off I-985.

Hirling said the plant is currently at full capacity, and the City Council and staff aim to finance plant expansion — to perhaps 3 million gallons — with funds generated by the city’s current tax allocation district.

"Our projections are we’re going to need more sewer capacity than we currently have," Andrew said. "If it wasn’t for the (tax allocation district), it would be very difficult for the city to move ahead with the plant expansion."

Andrew said the challenge is not to grow the sewer system faster than the city’s sewer and water customer base.

"We’re at our limit now," Hirling said. "If we want to bring business to Flowery Branch, then we absolutely must increase our capacity."